The burgeoning space tourism company revealed that it grossed nearly $2 million in revenue between April and June.
Key Details
- Virgin Galactic reported its second-quarter revenues on Tuesday, showing that revenues have increased 432% from second-quarter 2022 ($357,000) to second-quarter 2023 ($1.9 million).
- Two successful flights of the VSS Unity have opened the company up for commercial business, in addition to added revenue from “future astronaut membership fees.”
- Unfortunately, this still amounts to a net loss of $134 million for the company, a noted increase from $110.7 million last year.
- The company blamed the increased spending on “an increase in research and development expenses related to the development of the future fleet.”
- Virgin Galactic’s stock is down 6.3% following yesterday’s announcement.
Why It’s Important
Billionaire Richard Branson’s two-decade project to bring commercial spaceflight to life has been a long-time coming, with numerous delays, high sunk cost, and deadly failure in the runup to June’s first successful flight of the VSS Unity. The project has already drawn notable attention—with big-ticket celebrities like Leonardo DiCaprio and Lady Gaga lining up for ticket prices between $200,000 and $450,000 to fly to the atmosphere’s edge.
Unfortunately, the company is struggling to produce a viable path to profitability. The business has operated at a loss since its inception, losing hundreds of millions of dollars per year to reach its goal of sustainable space tourism. It reported its highest losses ever in the first quarter of this year at $159 million.
The company has a significant hurdle to overcome, facing limited demand, limited revenue, increasing debt, and less than two years of liquid capital to dig its way out of its current situation—made worse by the abrupt collapse of its sister company Virgin Orbit on April 4, filing for bankruptcy protection, and firing its entire staff.
Notable Quote
“During the quarter, we successfully completed two spaceflights in two months, including the launch of commercial service in late June with a scientific research mission. Scheduled for next week, the ‘Galactic 02’ mission will deliver a transformational experience for our first private astronauts, and we expect to continue broadening access to space with monthly flights thereafter. Our financial position remains strong, and we remain focused on scaling the business and delivering our Delta Class spaceships for commercial service in 2026,” says CEO Michael Colglazier.
Backing Up A Bit
As we previously reported, Virgin Group founder Richard Branson has made a successful business portfolio by investing in poorly run businesses and learning to run them better. It is most well known for Virgin Airlines but controls over 400 companies.